Wall Street analysts and financial accountants have dominated this discussion for
so long that it has become an unchallenged truth that making money is synonymous with increasing reported quarterly earnings. The owners of a corporation, however, are the shareholders, and shareholders do not take home the company’s earnings. The only way for shareholders to make money is if the company pays dividends or if the price of the company’s stock rises. Since dividends are really equivalent to forgone capital gains, the argument arrives at an inescapable conclusion: For a corporation, “making money” translates directly to creating wealth for the owners by increasing the company’s market price. Reported earnings are, in fact, irrelevant.
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Lean production is rapidly displacing conventional mass production at manufacturing companies in the US and throughout the world. Human resource practices play a critical role in any company’s program to develop and institutionalize lean methods on the shop floor. One approach that has been successful at many companies involves organizing production workers into self-directed work teams. Teams of between five and fifteen
workers take responsibility for an integrated, customer-driven production process. Team members cross-train in many of the tasks within the defined process, and gradually expand their capabilities to include administrative and support roles. As the team matures, it slowly becomes increasingly autonomous, until it functions with minimal supervision. Texas Instruments Defense Systems and Electronics Group (TI DSEG) has pioneered the
concept of self-directed work teams. This thesis presents a case study and analysis of two particular teams at TI DSEG: the Switch Filter/Beam Former Team, and the Diamond Point Turning Team. Both teams have achieved a high-level of maturity in terms of their
degree of autonomy and the sophistication of their activities. The objectives in studying these two teams are to highlight the key factors that contributed to their success, to uncover the pitfalls and roadblocks they encountered along the way, and to document the organizational structures and operating procedures that support the self-directed team concept.